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Building approvals rise in Feb

Building approvals rose strongly in February, although economists caution against reading too much into a single month's result.

Approvals for the construction of new homes and units rose 3.1 per cent in February, the Australian Bureau of Statistics said.

The result was above market forecasts of a 2.5 per cent improvement and represented a strong bounce back from January's two per cent fall.

JP Morgan chief economist said building approvals figures were often volatile so more data was needed to determine the current trend in the housing industry.

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"There is some recovery there, but I think you would need to see few more months of building approvals going up before we can be too confident that that can be sustained," he said.

"There are big bounces in public spending, there are big movements in the higher density segment which can be quite volatile so it is hard to get a trend out of there."

The biggest change was in approvals for total public sector dwellings units, which more than doubled in the month.

Total private sector dwelling approvals rose 0.9 per cent.

RBC Capital Markets economist Michael Turner said although the headline February figures showed strong growth in total building approvals, the improvement in private dwelling approvals was relatively modest.

There was also no indication that growth in the housing sector would improve significantly during 2013.

"We're still a bit sceptical that there is that much momentum in the housing market just at the moment and those data released today were consistent with that," he said.

"There is modest improvement there and that is probably going to be the case for the rest of the year."